Transcript of "Measuring Access To Financial Services Worldwide. Consultative Group to Assist the Poor/The World Bank"

2.
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4.
Figures
1 Developing countries have a third the deposits per person of developed countries 2
2 Developing countries have a quarter of the loans per person of developed countries 3
3 Developing countries have narrower outreach 4
1.1 The main financial regulator supervises nonbank financial institutions in half the countries
surveyed 7
1.2 Data are limited on the number of deposits and loans, especially for nonbanks 7
1.3 For cooperatives, few countries provide data on access 8
1.4 In almost half of countries specialized state financial institutions are regulated by the main bank
regulator 9
1.5 In more than 40 percent of countries microfinance institutions are regulated by the main bank
regulator 9
2.1 The majority of deposit accounts are in commercial banks, but nonbanks play a significant role
as well 13
2.2 Countries with higher poverty rates have the lowest account penetration 14
2.3 In countries with higher incomes and greater availability of deposit services, average deposit size is
smaller relative to average income 14
2.4 Average account size relative to income in nonbank institutions is lower than in commercial
banks 15
2.5 Nonbank institutions—important in delivering deposit services 16
2.6 Income, deposit insurance, and population density correlate with deposit account penetration 17
2.7 Information requested as part of “know your customer” requirements 19
2.8 Only 20 countries promote basic accounts 20
2.9 Forty countries offer government-to-person payments through bank accounts 21
2.10 Availability of retail payment system and prevalence of government-to-person payments 22
2.11 Promoting savings schemes 23
3.1 Change in perceptions of access to credit is not correlated with a change in use of credit 26
3.2 In higher income countries loans to individuals account for a greater share of the total volume 27
3.3 Loan sizes are large relative to income in poorer countries, where there are few borrowers 28
3.4 Cooperatives, specialized state financial institutions, and microfinance institutions are an important
source of credit in many countries 29
3.5 Loan sizes in cooperatives, some specialized state financial institutions, and microfinance institutions
are smaller than in commercial banks 30
3.6 Countries with more comprehensive credit information systems have more bank loans to individuals 31
3.7 Private credit bureaus cover a broad range of regulated and unregulated credit providers 32
3.8 More countries use disclosure and not usury ceilings as the main consumer protection 32
3.9 The share of countries with requirements to disclose loan rates ranges from 50 percent in South Asia
to 91 percent in high-income countries 33
3.10 Requirements to disclose effective interest rates are widespread 33
3.11 Interest rates are lower in countries with more competitive and less concentrated financial markets,
but there is no relation to usury ceilings 35
4.1 Having more “touch points” is correlated with a greater deposit and loan penetration 38
4.2 There are fewer rural branches per rural resident in developing countries than in developed
countries 39
iv Financial Access 2009

7.
Overview
Financial inclusion—providing ac- policymakers, researchers, practi-
cess to financial services for all— tioners, and multilateral and bi-
has gained prominence in the past lateral investors.
few years as a policy objective for
national policymakers, multilateral Measuring access—
institutions, and others in the de- getting more and better
velopment field. The United Na- data on regulated
tions designated 2005 the In- financial institutions is a
ternational Year of Microcredit, first major step
adopting the goal of building in-
clusive financial systems.1 To as- To guide monetary policy and
sist policymakers in designing ef- monitor systemic risks, financial
fective policies and tracking global regulators in all countries collect
progress in financial inclusion, the information on the values of de-
World Bank collected the first set posits and credit. But the Finan-
of indicators of financial access cial Access Survey indicates that
in countries around the world in fewer than 70 percent of coun-
20052 and updated these indicators tries collect information on the
for selected countries in 2008.3 number of bank deposit accounts.
And even fewer countries have in-
Building on this work, Financial formation on regulated nonbank
Access 2009 introduces new data institutions—only 30 percent of
from a survey of financial regula- countries could provide informa-
tors in 139 countries. It presents tion on the number of deposit ac-
indicators of access to savings, counts in cooperatives, specialized
credit, and payment services in state financial institutions, and
banks and in regulated nonbank microfinance institutions. Data
financial institutions—reviewing on the number of loans are even
some policy initiatives that sup- more limited.
port financial inclusion. As the
first in an annual series docu- Policymakers need reliable in-
menting access to financial ser- formation on access to financial
vices around the world, it is in- services to design effective poli-
tended for a broad audience of cies, set priorities for actions, and
1

8.
monitor progress. The first step is relation to average income. Lower they address a binding constraint,
to start regularly collecting a set income clients are served mainly be it cost or distance. Basic bank-
of standardized indicators for all by nonbank financial institutions, ing aims to reduce the cost of us-
regulated financial institutions including cooperatives, specialized ing savings accounts, but it has
in a country. These indicators in- state financial institutions, and little effect if a bank branch is
clude the number of deposit ac- deposit-taking microfinance insti- too far away and no other access
counts and loans, the number of tutions, where average deposits are point is available nearby. Trans-
deposit clients and borrowers, and smaller. Banks remain the main ferring government payments to
the number of financial access holder of deposits worldwide, but deposit accounts can significantly
points, such as branches, agents, in some countries nonbank deposit reduce the costs of delivering gov-
and automated teller machines. service providers hold more depos- ernment transfers and increase ac-
its than banks and serve a broader cess to deposit services. But such
Regulators can facilitate data col- segment of the market. transfers require a developed retail
lection by setting clear guidelines payment system and carefully de-
for reporting key access data and Financial inclusion policies—such signed deposit service products to
weighing the benefits of better as offering basic accounts, trans- improve access. To be effective, fi-
data with the costs of compliance. ferring government payments to nancial inclusion policies should
Similar to the approach for mon- individual accounts, and encour- be comprehensive, addressing the
itoring systemic risks, a focus on aging saving through matched main barriers to financial inclu-
larger institutions is justified, es- and tax-advantaged savings ac- sion that individuals face.
pecially among nonbank financial counts—are concentrated in
institutions, which often lack nec- high-income countries, far from Increasing access to
essary systems to report the data. widespread. When implemented credit—consumer
Where different regulators super- in developing countries, they usu- protection is key
vise various types of financial in- ally work only if participating fi-
stitutions, better coordination is nancial institutions see them as a Large-scale bank lending to in-
needed to gather the data on access viable business proposition and if dividuals, small enterprises, and
in the entire regulated system.
Increasing access to Developing countries have a third the deposits
Figure 1 per person of developed countries
saving and payment
services—policies
successful only if Number of 1.77
bank deposits
financial institutions are per adult 0.52
on board
0 0.5 1.0 1.5 2.0
Estimates in this report indicate Value of 76
bank deposits
that there are as many bank de- (percent of GDP) 42
posit accounts as people in the Developed countries
world today. But these accounts are Average Developing countries
bank deposit 44
concentrated in developed econo- (percent of GDP
120
mies (figure 1). In poor countries per capita)
few lower income people use bank 0 30 60 90 120
deposit accounts, reflected in the
higher average account balances in Source: Financial Access database.
2 Financial Access 2009

9.
microenterprises is fairly new, official income records. By gener- in consumer credit, seem to have
Overview
even in developed countries. Un- ating information that helps lend- limited effect but require further
regulated lenders and regulated ers assess risk and allocate credit analysis.
nonbank financial institutions re- more efficiently, comprehensive
main a major credit provider in credit registries contribute to the Extending the reach of
many countries, though the lack development of credit markets. financial services—
of data makes precise estimates As more people enter the finan- new technologies
difficult. Based on available bank cial system and credit products and simplified branch
data, there are nearly four times become more complex, rules and regulations hold
more loans per adult in devel- regulations to protect consumers promise
oped countries than in develop- and overcome information and
ing countries (figure 2). As with power imbalances need to be put Bringing financial services to ru-
deposit services, banks cater to in place. ral clients is the biggest challenge
richer clients, reflected in higher in the quest for broad-based fi-
ratios of average loan size to av- This report reviews three inter- nancial inclusion (figure 3). Of-
erage income. Regulated non- ventions: disclosure requirements, ten the main barrier to finan-
bank financial institutions cater interest rate caps, and methods to cial inclusion in rural areas is the
to poorer clients than banks and address excessive lending that can great distances that rural resi-
provide smaller loans. In some result in consumer overindebted- dents must travel to reach a bank
countries nonbank financial insti- ness. Improved transparency and branch. Poor infrastructure and
tutions evolve into dominant reg- disclosure allow borrowers to telecommunications, and heavy
ulated credit providers. make informed choices and can branch regulation, also restrict
facilitate competition in finan- the geographical expansion of
Lending to individuals and small cial markets, eventually leading to bank branch networks. In many
entrepreneurs requires processing lower prices and improved prod- developing countries there are
many small loans to people who ucts. Policies to restrict interest fewer bank branches per rural
generally lack a credit history or rates or credit quantity, especially resident than per urban resident.
Nonbank financial institutions
help fill this gap, with half the
Developing countries have a quarter of the
Figure 2 countries reporting more non-
loans per person of developed countries
bank branches per rural resident
than bank branches.
Number of
bank loans 0.82
to individuals 0.22 Better geographic outreach can
per adult
remove distance as a barrier to
0.0
0 0.2 0.4 0.6 0.8 1.0
financial access for both lend-
Value of
37 ers and borrowers, perhaps al-
bank loans
to individuals
13
lowing banks to be more respon-
(percent of GDP)
Developed countries sive and less intimidating to their
Average bank loan Developing countries customers.
to individuals 53
(percent of GDP
128
per capita) Simplifying the branch approval
0 30 60 90 120 150 process can facilitate geographi-
cal expansion of branches. But
Source: Financial Access database.
the cost of building physical
Measuring Access to Financial Services around the World 3

11.
1 Measuring financial access
To design effective policies and for access.1 This report uses access
track progress policymakers need and use interchangeably.
to measure financial access. While
a growing number of countries What are the best indicators of fi-
collect data on the availability and nancial access? In a perfect world
use of financial services, there is they would be the numbers of
no consistent set of global finan- people, households, and firms sav-
cial access indicators to allow com- ing, receiving credit, making pay-
parison across countries and over ments, and using other financial
time. Building on earlier work by products from various sources,
the World Bank, this report pres- both formal and informal. These
ents the most recent and compre- indicators would allow a break-
hensive set of global financial ac- down by income, firm size, and
cess indicators collected through a location. And if they were col-
regulator survey in 139 countries. lected regularly using a consistent
The first in an annual series, it dis- methodology, they could be com-
cusses the challenges in collecting pared across countries and time.
comprehensive global indicators But such global indicators do not
and describes the access to finan- exist today.
cial services in countries around
the world. For several countries some ac-
cess indicators are available from
A basic challenge in measuring fi- country-level household and en-
nancial access is differentiating terprise surveys. These surveys
between the access to and use of fi- provide a wealth of information on
nancial services. Individuals may household and firm behavior and
choose not to open a bank account are indispensible for setting and
or to borrow even if these services evaluating policies for improving
are available, reducing use relative access to finance at a national or
to access. Such voluntary exclusion subnational level. Indeed, a grow-
is difficult to measure, however, ing number of countries imple-
because it is not directly observ- ment national household surveys
able. So, researchers rely on indi- that now include questions about
cators of use as an approximation financial access.
5

12.
But it is difficult or impossible quarterly by the regulator using a Overall, however, using household
to compare survey results across consistent methodology and can surveys in combination with regu-
countries because of differences in be cross-checked with other da- latory data can improve data con-
questions and methods.2 There are tabases available to the regulator, sistency and quality. By system-
other limitations as well. Most na- such as credit registries. Second, atically collecting regulatory data
tional surveys are not conducted it is not subject to potential sam- using a consistent methodology,
regularly and may not be compa- pling biases, because data collec- regulators can routinely monitor
rable from year to year, because tion through standard reporting developments in financial access.
questions and household samples covers the entire regulated fi- Harmonizing the methodology
change over time. Household sur- nancial system. Third, regulators for key financial access indicators
veys are costly, often requiring gather data on actual financial would also allow for a more pre-
interviewers to travel across the obligations, reducing potential cise international comparison and
country to collect the data. They inaccuracies related to mistakes analysis.
can take a year or more to im- and omissions by survey respon-
plement. And there are concerns dents. Fourth, the cost of collect-
about sampling and the represen- ing such data is relatively small
tativeness of results, especially in because it leverages existing data What data are
large countries. collection processes. The basic fi-
nancial access indicators are fairly
available from
An alternative is to collect infor- easy to compute and report for regulators?
mation on the use of financial ser- institutions using standard infor-
vices through regular reporting by mation systems. Modern financial systems are
financial institutions to the finan- complex, featuring great variety in
cial regulator, so-called supply- But supply-side data have limita- regulated and unregulated finan-
side data. Many financial regu- tions. They cover only the regu- cial service providers. Few coun-
lators collect information on the lated financial system, excluding tries have a single central super-
number of deposit accounts and informal financial services, which visor or coordinating entity for
the number of loans. Closely cor- can have a larger number of cli- all financial institutions. But the
related with the data from house- ents, especially in low-income main financial authority, usually a
hold surveys,3 such data can be countries. In addition, the num- central bank or bank supervisory
a good basis for indicators of ac- ber of accounts in the financial agency, regulates nonbank finan-
cess to financial services. Indeed, system often overstates the num- cial institutions along with banks
a growing number of countries ber of account holders by a fac- in about half the world’s countries
collect these data regularly as part tor of two or more due to multiple (figure 1.1). The Financial Access
of standard reporting. This is the accounts. Even in countries that Survey collected information on
approach used in this and earlier count the number of depositors a broad range of regulated finan-
World Bank reports.4 and borrowers, it is usually impos- cial institutions in 139 countries
sible to avoid double-counting in- through a questionnaire to the
There are several advantages to dividuals with accounts and loans main financial regulator, such as a
using data collected by regula- in multiple institutions5 or count- central bank or a bank supervisory
tors as a basis for global finan- ing a large number of dormant ac- agency. When possible, the main
cial access indicators. First, the counts. Moreover, many regula- financial supervisor also provided
approach helps ensure data con- tors do not collect financial access the data on regulated nonbank fi-
sistency over time because the data, or do so only on an ad hoc nancial institutions supervised by
data are collected monthly or basis. other agencies in the country.
6 Financial Access 2009

13.
There are often many types of organizations, specialized state fi- Commercial banks
regulated financial institutions nancial institutions, and micro-
in a country. To facilitate inter- finance institutions. It collected The Financial Access Survey indi-
national comparison, the survey information on selected financial cates that the data on use of finan-
asked regulators to provide data inclusion policies and statistics on cial services are not always avail-
grouped in four broad types of
regulated institutions: banks (in-
cluding state-owned banks), coop-
the number of deposit and loan
accounts, the number of deposi-
tors and borrowers, and the value
able, even for banks, and much
less for regulated nonbank finan-
cial institutions. Data on values
1
Measuring financial access
eratives and other member-owned of deposits and loans (figure 1.2).6 of loans and deposits in commer-
cial banks are the most compre-
hensive, available for more than
Figure 1.1 The main institutions in half the countries surveyed
financial regulator supervises nonbank 90 percent of countries (see fig-
financial
ure 1.2). This information, part of
standard reporting, collected from
Commercial bank balance sheets, is used to
100.0
banks
monitor systemic risks and guide
monetary policy—the core objec-
Cooperatives 57.7
tive of a central bank. Information
on the number of deposits is col-
Specialized state
nancial institutions
48.1 lected in only 64 percent of coun-
tries, and that on loans in only
Micro nance
43.8
50 percent. Developing countries
institutions
collect these data more often than
0 20 40 60 80 100 developed countries do.7
Share of reporting countries (percent)
The best indicator for measuring
Source: Financial Access database.
access to financial services is the
number of depositors and borrow-
ers. But only about 20 percent of
Figure 1.2 Dataloans, especially for nonbanks
are limited on the number of deposits countries surveyed have data on
and
the number of depositors or the
Number of countries number of borrowers. Even when
150 Supervision of institutional type Data on number of collected, the data for the total
Data on value of deposits individual depositors
Data on number of deposit accounts Data on number of number of depositors double-
120 Data on value of loans individual borrowers counts those with accounts in
Data on number of loans
multiple banks. For credit the
90 double-counting can be solved by
extracting data from credit regis-
60
tries, where available. Credit reg-
istries that merge information at
30
the loan level to provide the con-
solidated debt for each borrower
0
Commercial banks Cooperatives Specialized state Micro nance can provide the total number of
nancial institutions institutions unique borrowers and their re-
Source: Financial Access database.
spective debt.
Measuring Access to Financial Services around the World 7

14.
Cooperatives can provide data on financial ac- Specialized state
cess (see figure 1.2). Where they financial institutions
Financial cooperatives, an impor- are supervised by the main finan-
tant provider of financial services cial regulator, fewer than 60 per- Specialized state financial insti-
around the world, are regulated cent have data on the values of de- tutions operate in more than 60
by a financial regulator in only posits and loans, and just a third percent of the countries surveyed
half the countries surveyed (figure on the number of accounts and and range from non-deposit-
1.3). In the other half they are ei- loans. The significant difference taking wholesale lending facilities
ther not regulated (25 percent) or in data availability by region re- to nonlending postal banks. In
are regulated by other ministries flects varying levels of sophistica- 48 percent of these countries the
(17 percent), such as ministries of tion among cooperatives. Latin main bank regulator supervises
cooperatives. These ministries su- America has the best data cover- specialized state financial institu-
pervise all types of cooperatives, age, with 80 percent of countries tions (figure 1.4). In 14 percent
and few have the capacity to su- collecting data on values and 60 these institutions are supervised
pervise all of them. In developed percent on numbers of loans and by other government agencies,
countries financial cooperatives deposits. In Sub-Saharan Africa such as ministries of finance for
evolved into mainstream finan- only 3 of 15 countries where the development banks and ministries
cial institutions, and regulators financial authority regulates co- of post and communications for
seldom differentiate between the operatives had data on numbers postal banks. Even though spe-
supervision of cooperatives and of deposits and loans. Many coop- cialized state financial institutions
banks. In 76 percent of high- eratives are small, some struggle are an important provider of ser-
income countries the bank regu- with basic accounting, and few vices, very few countries can pro-
lator also supervises cooperatives, have a management information vide data on the outreach of these
compared with 53 percent in de- system. It may not be possible to institutions (see figure 1.2).
veloping countries. collect comprehensive data on all
cooperatives, but many large co- Microfinance institutions
Even where financial coopera- operatives in most countries can
tives are regulated, few countries provide data. A specific challenge in measuring
microfinance is that it is defined
not by the type of institution but
Figure 1.3 For cooperatives, few countries provide data on access by the market segment served. For
example, many cooperatives op-
erate in rural and poor areas and
Not regulated Regulated by a provide microfinance services.
25% bank regulator only In some countries banks enter
the space traditionally served by
42% microfinance, such as ICICI in
India, Equity Bank in Kenya, and
17% BRI in Indonesia.
Regulated by
other regulator only
16% In 57 countries microfinance in-
stitutions, usually deposit-taking,
Regulated by botha
are defined for regulation pur-
Note: Data are for 130 countries.
a. Multiple types of cooperatives exist, some regulated by different regulatory bodies. poses as a separate institutional
Source: Financial Access database.
type and regulated by the main
8 Financial Access 2009

15.
financial authority (figure 1.5). banks supervise microfinance in- institutions than for other regu-
In at least 10 countries multiple stitutions in 80 percent of coun- lated institutions. Only a third of
forms of microfinance institu- tries.8 Fewer than 10 percent of countries had data on the number
tions exist, with at least one form high-income countries regulate or of loans. Given the social focus
regulated by another authority, even have microfinance institu- of most microfinance institutions
such as the ministry of finance.
Microfinance institutions are su-
pervised by the main financial
tions as a category within the reg-
ulatory framework.
and their objective to improve
outreach, they usually monitor
the numbers of their borrowers
1
Measuring financial access
authority in more than 40 per- Data on the number and value and savers, as demonstrated by
cent of developing countries. An of loans and deposits are much their self-reporting of such data to
exception is Africa, where central less available for microfinance the Microfinance Information Ex-
change. Asking microfinance in-
stitutions to routinely report these
Figure 1.4 In almost half ofregulated by the main bank regulator
countries specialized state financial data to the regulator could be
institutions are
valuable for monitoring access to
financial services for the poor. But
Regulated by a as for cooperatives, the regulator’s
bank regulator only ability to collect comprehensive
41% data on microfinance institutions
Not regulated 38%
is constrained by limited resources
and capacity.
14% 7%
Regulated by other
regulator only
Regulated by botha Improving data
Note: Data are for 129 countries. collection for
measuring
a. Multiple types of specialized state financial institutions exist, some regulated by different regulatory bodies.
Source: Financial Access database.
access
Figure 1.5 In more than 40 regulated by the mainmicrofinance
percent of countries
institutions are bank regulator
There is no substitute for reliable
data. Collecting country informa-
Regulated by a tion on the use of financial ser-
bank regulator only vices is essential to track progress
35% and set priorities for action for na-
Not regulated 48%
tional and international bodies.
Regulators can facilitate data col-
lection by setting clear guidelines
9% for reporting key financial access
8% Regulated by botha data and by weighing the ben-
efits of better data with the costs
Regulated by other
regulator only of compliance for different finan-
Note: Data are for 130 countries.
a. Multiple types of microfinance institutions exist, some regulated by different regulatory bodies. cial institutions. Similar to the ap-
Source: Financial Access database.
proach for monitoring systemic
Measuring Access to Financial Services around the World 9

16.
risks, a focus on larger institutions surveys, definitions of formal and debt. Such aggregation is not pos-
in terms of the number of clients informal financial institutions, sible for deposits, because informa-
is justified, especially among non- and availability and use of service. tion on deposits in most countries
bank financial institutions, which For an in-depth discussion, see is protected by strong bank secrecy
often lack systems to report the Barr, Kumar, and Litan (2007). provisions, making it impossible to
data. Where different regulators 3. Demirgüç-Kunt, Beck, and collect data on individual deposits
supervise various types of financial Honohan 2008. and deposit holders.
institutions, better coordination is 4. Beck, Demirgüç-Kunt, and 6. See methodology appendix
needed to gather the data on access Martinez Peria 2007; World Bank for more detail.
in the entire regulated system. 2008a. 7. This is due in part to the fact
5. For credit this problem can that the financial systems in many
be solved by extracting data from developing countries are smaller
credit registries. A credit registry and regulators are able to obtain
Notes merges information at the loan necessary data on an ad hoc basis
level to provide the consolidated when requested.
1. Barr, Kumar, and Litan 2007. debt for each borrower and can 8. Member countries of the Cen-
2. Some of the differences in- provide the total number of unique tral Bank of West African States
clude household and individual borrowers and their respective did not respond to the survey.
10 Financial Access 2009

17.
2 Savings and payments
In most developed economies more as given their transformation into
than 90 percent of households use deposit-taking institutions. And
bank accounts to save and to make many governments and financial
payments.1 The ubiquity of such regulators have placed financial
services speaks to their critical role inclusion somewhere on their list
in daily life. But where they are of priorities, some nearer the top
not available, as in many poorer than the bottom.
countries around the world, indi-
viduals are denied a basic service
and forced to rely on informal sav-
ings and payment techniques that Measuring
may be of inferior security, liquid-
ity, and return. Recent research
access to
shows that low-income entrepre- deposit services
neurs given access to a formal
bank account invest more in their The most appropriate measure of
businesses, consume more, and are the use of deposit services is the
less prone to sell business assets to number of unique depositors in a
deal with health emergencies.2 country. But few regulators have
these data. This report uses the
Despite many challenges, there are number of deposit accounts per
promising signs that the poor can 1,000 adults, including saving,
profitably be offered savings and checking, and time, as the proxy
payments services in great num- measure for access to financial
bers. Perhaps most promising are services (map 2.1).3
the developments in branchless
banking—the use of innovative Rates of deposit account owner-
technologies (such as smart cards ship in formal institutions vary
and mobile phones), coupled with greatly around the world. Of the
the use of nonbank agents, to pro- seven countries that have fewer
vide banking services to areas pre- than 100 bank accounts per
viously difficult to serve profitably. 1,000 adults, five are in Africa—
In addition, many microfinance Burundi, Democratic Republic
institutions have begun to take of Congo, Ethiopia, Madagascar,
11

18.
Seven countries have fewer than 100 deposit accounts in banks and
Map 2.1 regulated nonbank financial institutions per 1,000 adults
Deposit accounts per 1,000 adults
500.0 or fewer
500.1–1,000.0
1,000.1–2,000.0
2,000.1 or more
No data
Note: Estimates for countries that did not report the number of accounts in commercial banks were generated from a statistical model that uses income per capita and vari-
ous features of the financial system—such as the number of bank branches per 100,000 adults and the value of deposits per adult—to predict the number of commercial bank
accounts. Where the number of accounts in nonbanks was not reported, an attempt was made to fill in data from other sources. The estimates for bank and nonbank categories
were summed by country to estimate the total number of deposit accounts in each country. See the methodology appendix for more details.
Source: Financial Access database.
and Mauritania. High-income accounts in commercial banks How many people use the formal
countries exhibit the greatest de- per 1,000 adults.5 Higher rates financial system? Regulators do not
posit penetration, with an average of bank account ownership thus have data on the number of unique
of more than 2,000 accounts per equate to more banked individu- depositors, but a rough estimate is
1,000 adults. als in the population. possible by combining information
on the number of accounts from
Underlying the wide variation in There are more deposit the Financial Access Survey with
rates of account ownership are accounts than adults in the data from recent comparable
large differences in poor house- the world, concentrated household surveys. Data on the to-
holds’ access to formal savings. In in the rich countries tal number of adults with a bank
recent household surveys Malawi, account come from 17 compara-
Pakistan, Rwanda, and Uganda4 Adding all the predicted and re- ble household surveys conducted
all reported fewer than 20 per- ported values puts the global in both developing and developed
cent of households saving through number of bank and nonbank ac- countries since 2003. Dividing the
formal institutions, and Financial counts at approximately 6.2 bil- reported numbers of bank accounts
Access Survey data show them lion, or more than one for each in these countries by the number
to have fewer than 225 bank ac- adult on the planet.6 While there of adults with an account gives the
counts per 1,000 adults. In con- are more than enough accounts to number of accounts per banked
trast, the European Commission go around, they are not distrib- adult—estimated between 2.2 and
calculates that in Belgium and uted equally. In developed coun- 3.8.8 Assuming three accounts
the Netherlands more than 98 tries there are an estimated 3.2 per banked adult on average puts
percent of households have bank accounts per adult, but in devel- the number of unbanked adults at
accounts, and survey data show oping countries, less than than about 160 million (19 percent of
them to have more than 1,500 0.9 account per adult.7 adults) in developed countries and
12 Financial Access 2009

19.
2.7 billion (72 percent of adults) in reported data on the number and of accounts in nonbank institu-
developing countries.9 value of deposits, even when regu- tions likely is more conservative
lated by the main financial author- than the one for banks, understat-
Banks are the main providers of ity, which makes robust statistical ing the true size of the nonbank
deposit services, holding more estimates difficult. The estimates deposit-taking sector.
than 80 percent of all deposit ac- here include only the number of
counts (figure 2.1). At least 20 accounts for countries that re- In developed countries nearly 19
percent of accounts are held out- ported the number of accounts percent of accounts are held with
side commercial banks in coop- in the survey or where additional cooperatives, credit unions, and
eratives, specialized state finan-
cial institutions, and microfinance
institutions. This estimated ratio
data sources were available. Even
where data were reported, they are
not always complete because not
other institutions with a mutual
ownership structure, four times
the estimated 5 percent in devel-
2
likely understates the true cover- all institutions report to the reg-
Savings and payments
oping countries (though, again,
age of nonbanks, especially in de- ulator. Due to these data limita- the true share of cooperatives in
veloping countries. Few countries tions, the estimate of the number developing countries is likely to
be underestimated). Public insti-
tutions such as postal banks and
Figure 2.1 The majority of deposit accounts are in role as well
commercial specialized state financial institu-
banks, but nonbanks play a significant
tions are also important provid-
Developing countries ers of savings services in develop-
ing countries, holding 12 percent
Micro nance institutions 1%
Specialized state
of total deposits. Microfinance
nancial institutions 12% institutions, as a separate regu-
Cooperatives lated type of institution, hold only
5%
about 1 percent of deposits, con-
centrated in developing countries.
As a rule, bank accounts
82% Commercial banks are for the well off, with
exceptions
Financial access is not a problem for
Developed countries the rich, even in poorer countries.
Specialized state nancial institutions 1%
Countries with the highest num-
bers of households below the inter-
Cooperatives national poverty line often have the
19% lowest deposit account penetration
(figure 2.2). Their banking sectors
target mainly the richest inhabit-
ants, leaving the more numerous
poor with few options. Worldwide,
80% Commercial banks
an “access gap” excludes the world’s
poorest from the formal financial
sector, leaving the majority of ac-
Source: Financial Access database.
counts owned by the rich.
Measuring Access to Financial Services around the World 13

22.
Figure 2.5 Nonbank institutions—important in delivering deposit services
Burundi Commercial banks
Zimbabwe Cooperatives
Congo, Dem. Rep. Specialized state nancial institutions
Ethiopia Micro nance institutions
Rwanda
Mozambique
Uganda
Madagascar
Gambia, The
Bangladesh
Cambodia
Lesotho
Pakistan
Zambia
Yemen, Rep.
Nicaragua
India
Bolivia
Philippines
Syrian Arab Republic
Georgia
Morocco
Swaziland
El Salvador
Ecuador
Tunisia
Colombia
Peru
Jamaica
Panama
Botswana
Argentina
Malaysia
Uruguay
Mexico
Chile
Poland
Latvia
Estonia
Czech Republic
Puerto Rico
Spain
Greece
Italy
Austria
United States
0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000
Deposit accounts per 1,000 adults
Note: This figure does not represent the totality of the financial system and corresponds solely to the aggregation of data for different institutional categories, when available.
Not all countries provided information on every institution type. Countries are listed in ascending order of income per capita.
Source: Financial Access database.
sector. In Bolivia, the Philippines, number of clients served by these by a broad set of factors including
and Rwanda they have roughly institutions in some countries also overall level of economic develop-
three-quarters of the number highlights the need for proper su- ment, trust in the financial sys-
of deposit accounts of the regu- pervision and regulation. tem, distance, and competition.
lated cooperative sector.12 Under Cross-country analysis using data
the right circumstances nonbank Features of countries for countries with information on
deposit-taking institutions, in- with higher account the number of bank deposit ac-
cluding cooperatives, specialized penetration counts shows a strong correlation
state financial institutions, and between bank deposit account
microfinance institutions, could The availability of deposit ser- penetration and income per cap-
reach many poor clients. The large vices in a country is influenced ita (figure 2.6). This relationship
16 Financial Access 2009